Higher rents, divestment gains boost PLife Reit's Q3 results

The Sawayaka Hirakatakan nursing home in Osaka, Japan, is one of the seven Japanese properties that Parkway Life Real Estate Investment Trust divested last December.
The Sawayaka Hirakatakan nursing home in Osaka, Japan, is one of the seven Japanese properties that Parkway Life Real Estate Investment Trust divested last December.PHOTO: PARKWAY LIFE REIT

Healthcare Reit announces distribution per unit of 3.36 cents, up 15.6% from a year earlier

Higher rents from existing properties and a partial distribution of the gains from the divestment of seven Japan properties last December boosted third-quarter results at Parkway Life Real Estate Investment Trust (PLife Reit).

Parkway Trust Management, the manager of the Reit, yesterday announced a distribution per unit (DPU) of 3.36 cents for the three months to Sept 30.

This represents a 15.6 per cent growth over the 2.9 cents from the same period a year earlier.

The healthcare Reit - one of the largest in Asia - posted a total distributable income of $20.3 million, up on the $17.6 million previously.

Gross revenue rose 2.5 per cent to $26 million, primarily from higher-yielding properties acquired from the asset recycling initiative and higher rent from Singapore properties, said the manager in a filing to the Singapore Exchange.

  • AT A GLANCE

  • Gross revenue:
    $26 million (+2.5%)


    Net property income: 
    $24.3 million (+2.4%)


    Distribution per unit: 
    3.36 cents (+15.6%)

Net property income expanded 2.4 per cent to $24.3 million, on the back of higher management fees.

For the nine months, gross revenue climbed 1.5 per cent to $76.4 million, while net property income was up 1.6 per cent to $71.4 million.

Earnings per unit for the quarter came in at 2.28 cents, down from 3.01 cents previously, while net asset value per unit stood at $1.70 as at Sept 30, slightly lower than $1.71 as at Dec 31 last year.

The manager said it expects the long-term prospects of the regional healthcare industry to remain robust, due to "rising demand for better-quality private healthcare services driven by the fast-ageing populations".

PLife Reit's overall portfolio, comprising 47 healthcare or related assets, is also supported by "favourable rental lease structures", where at least 93 per cent of its Singapore and Japan portfolios are protected from downside revenue risks.

While the manager acknowledged that macro headwinds are likely to persist, it also said it has guarded against the potential risks of rising interest rates.

The Reit has no long-term debt refinancing needs due until 2017 and has also hedged about 78 per cent of its interest rate exposure to "reduce interest rate risk and better manage its financing costs".

"Moving ahead, while we seek to be nimble to market changes, we will continue to build on our successful strategies to enhance our overall value and growth potential in a sustainable way," said Mr Yong Yean Chau, chief executive of the manager.

PLife Reit units closed flat at $2.33 yesterday.

A version of this article appeared in the print edition of The Straits Times on November 06, 2015, with the headline 'Higher rents, divestment gains boost PLife Reit's Q3 results'. Print Edition | Subscribe